2. Suppose that the firms in some industry emit an air pollutant that harms people who are exposed to the pollutant. This situation is illustrated in the graph below. Now suppose

that a new cost-saving abatement technology is widely adopted by the industry. Questions (2.1) through (2.4) ask you to examine this change. Aggregate MAC x Aggregate MD ET EU Emissions a. Which function in the graph will change with the new information, the MAC or MD function? [1 point] b. Which way will this function shift, up or down? [1 point] c. As a result, does the efficient level of emissions increase, decrease or stay the same? [1 point]/nd. Does the efficient emissions tax increase, decrease or stay the same? [1 point]